McCarter & English Helps NJ Hospital Go Solar With Innovative Financing

McCarter & English Helps NJ Hospital Go Solar With Innovative Financing

February 6, 2009 10:40

NEWARK, Feb. 6 -- Carrier Clinic, a Belle Mead, NJ-based healthcare center, recently signed a contract with a solar developer that allows the non-profit institution to benefit from federal renewable energy investment tax credits and other renewable incentives with a state-of-the-art financing structure.  The contract supports development of a large-scale solar photovoltaic array that will provide up to 50% of the electrical power for the not-for-profit healthcare provider for 25 years.

Institutions interested in tapping into renewable energy are increasingly turning to the so-called power purchase agreement model as a financing tool that allows the third party to benefit from the renewable energy tax credits and invest in the system development while the institution benefits from receiving a long-term supply of clean power without outlaying capital of its own.

The innovative structure allows even a non-profit organization to enjoy indirect benefits from federal and state tax incentives that promote investments in renewable energy and the growing green jobs economy.

Under the Power Purchase Agreement announced this week, enXco, an EDF Energies Nouvelles Company, will begin construction this spring of the up-to-1.9-megawatt project, which will be owned and operated by enXco to supply Carrier on a net-metering basis. The project, which will be the largest solar system on a New Jersey hospital campus, qualifies for New Jersey Renewable Energy Certificates.

"Successful renewable energy projects on this scale will require new business models and financial structures as much as new technology," said Susan Feeney, a Newark office tax partner and member of McCarter's Climate Change and Renewable Energy Practice Group. "We hope this will be a model for future development."

Carrier Clinic is a private, not-for-profit behavioral healthcare system which specializes in psychiatric and addiction treatment. Carrier's system includes an inpatient psychiatric hospital, a detoxification and rehabilitation center, an adolescent residential facility and a fully accredited middle and high school for students classified as emotionally disturbed.

McCarter & English, LLP's Climate Change and Renewable Energy Practice team draws from the firm's energy and utilities, environmental, tax, real estate, insurance coverage, litigation, and intellectual property lawyers to address the myriad legal needs of our clients. Members of the team are leading members of American Bar Association committees that focus on climate change and have participated on national and international panels that are educating lawyers in this emerging area of the law.

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The business case for the development of renewable energy projects, from biodiesel and ethanol to wind, solar, and distributed generation, is more compelling than ever as tax and regulatory incentives combine to attract investments. Emerging issues in environmental law and increasingly recognized principles of corporate social responsibility are encouraging public companies to voluntarily reduce greenhouse gas emissions, install clean energy alternatives, and invest overseas in projects under the Kyoto Protocol to respond to climate change concerns.

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